Crypto Briefing 8/20/22 – The Forecast

Crypto Briefing 8/20/22

Crypto Briefing 8/20/22

Bitcoin has been rejected once again at $24,000. While many people are calling for a bottom, we believe we are still in the midst of a bear market. We are watching Bitcoin’s price action closely.  If it declines beneath $18,000, then there could be extreme selling pressure before the next rally finally begins.

In the past 24 hours the crypto market has seen over $500,000,000 in liquidations. Crypto and leverage do not mesh well together, and in a scenario where Bitcoin breaks critical support of $18,000, then we may see even more crypto firms go insolvent. This great margin call could ultimately lead to a large gap down to $14,000 to $11,000. Regardless, after this correction is complete, we expect to see Bitcoin enjoy a choppy uptrend into year-end.

A unique opportunity we would like to highlight in the crypto space is an equity that many of you are familiar with: Coinbase.  Coinbase has recently been the recipient of many negative headlines throughout this bear market, primarily due to them laying off staff, ending their earn program, and posting poor earnings. Currently trading at $88, this stock is significantly below its IPO price of $342. We are long term bulls when it comes to the crypto space, and we believe Coinbase will remain a major player in the industry.

While Coinbase may not be as volatile as an altcoin, its compliance with securities regulations and its high growth potential make for some exceptionally strong fundamentals.  During 2021 and 2022, Coinbase was constantly being upgraded by major banks, but now in the bear market, firms such as Goldman Sachs have downgraded COIN to a sell right when it hit new all-time lows – very counterintuitive to proper investing.  Right now, Coinbase appears to be one of the least favorable companies in the crypto space, which, given its exceptional strength and potential, consequently makes us very excited about its future.